Tag: U.S. Senate

Accounting News Roundup: PwC Chips in $12.5 Million for J.P. Morgan’s FSA Fine; IRS Not Returning to Austin Crash Site; Senate Working on Proposal to Scale Back 1099 Requirements | 08.09.10

PwC To Provide Up To $12.5M To JPMorgan For FSA Fine [Dow Jones]
“J.P. Morgan Chase & Co. (JPM) disclosed in a regulatory filing Friday that PricewaterhouseCoopers LLP agreed to provide up to an aggregate of $12.5 million to the bank related to a fine J.P. Morgan had to pay to the U.K. Financial Services Authority.”

Late Ponzi schemer’s accountant surrenders license [Nashville Business Journal]
This accountant managed to surrender his CPA in just under four months for his role in a Ponzi scheme. Dave Friehling had to be stripped of his license nearly 9 months after pleading guilty. NY DoE should get with Tennessee and see how they do things.

IRS to stay at new Austin site after plane crash [AP]
“An Internal Revenue Service office will not return to the Texas building where a tax protester killed himself by crashing his plane into the structure.

IRS spokeswoman Lea Crusberg said Thursday that the agency has signed a two-year lease on another office space in Austin. She declined to identify the location.”


Senate Democrats Propose Scaling Back IRS Reporting Law [WSJ]
“The Nelson proposal would exempt from the reporting rules firms with fewer than 25 employees. For larger businesses, it would require information returns only in cases where payments to a single vendor exceeded $5,000 in a given year—down from $600 in the health-care law.”

Richtermeyer to Chair Management Accountants [Web CPA]
“The Institute of Management Accountants has named accounting professor Sandra Richtermeyer as the chair of its board of directors for the 2010-2011 fiscal year.

Richtermeyer, who also chairs the Department of Accountancy in the Williams College of Business at Xavier University in Cincinnati, is only the fourth woman ever to hold the position of IMA chair since the organization’s inception in 1919.”

BKD looks to grow health care practice with purchase of Grant Thornton team [Wichita Business Journal (partial subscription required)]
According to the message sent from Stephen Chipman, that we reported on at the end of July, this is the final transition that Grant Thornton will be making. What happens from here is anyone’s guess.

The AICPA Goes to Bat for Small Business; Requests Repeal of Expanded 1099 Reporting

In these pages last week, we brought up the expanded 1099 reporting requirements that could possibly bury some small busineocumentation. The question remains, how big is this pile? Will it require a shovel to dig out of the pile of paper or a bulldozer?

Based on the AICPA’s letter to the U.S. Senate that made the rounds yesterday, it will require a team of angry Ohioans – all with their own dozer – to unbury small business owners.


Alan Einhorn, the Chair of the AICPA’s Tax Executive Committee wrote the letter and in extremely tactful terms, expresses his discontent, “[W]e believe section 9006 of the Act should be repealed because the provision imposes extremely burdensome information reporting requirements on business taxpayers that cannot be justified in terms of the limited utility such information reports will provide to government.”

Adrienne boils that down in a less tactful manner, “You don’t have to be a CPA to see why this is a completely moronic idea. What happened to paperwork reduction? I love the use of ‘extremely burdensome’ – as most of you probably know, it’s got to be REALLY annoying to get the accountants to bust out the ‘extremely’ in a complaint.”

She makes a good point. Not to get all English-y on you but the adverb “extremely” doesn’t exactly make it a more effective sentence. Alan was clearly going for exaggeration in order to get his point across that this portion of the Patient Protection and Affordable Care Act is the most useless section of the entire act. And for some of you, that’s really saying something.

AICPA Letter to Congress Supporting Repeal of Expanded 1099 Reporting by Businesses

Non-Profits Get Picked On (And Deserve Some of It)

When budgets are tight, it only makes sense that non-profits would become targets since they tend to get the most free rides. We’ve seen it with this 990 push (kind of like 404(b) for < $75 million and new health care rules that require companies to send in 1099s for every vendor purchase over $600, it feels a little like bureaucratic busywork to me) and now non-profit executive compensation is in New Jersey tie’s crosshairs.

A provision in his state’s recently passed budget limits executive salaries at nonprofits that do business with the state.

Firedoglake foamed at the mouth over recent comments by Tom Coburn after he shot down $425 million in fresh money for the Boys and Girls Clubs. FDL appeared absolutely incapable of comprehending caps on non-profit salaries when for-profit CEOs earn “500 times” more than their non-profit counterparts.

On Capitol Hill, four senators this spring refused to approve a $425 million package of federal grants for the Boys & Girls Clubs of America after staff members looked at the organization’s tax forms as part of a routine vetting process and were surprised to learn that the organization paid its chief executive almost $1 million in 2008 — $510,774 in salary and bonus and $477,817 in retirement and other benefits.

“A nearly $1 million salary and benefit package for a nonprofit executive is not only questionable on its face but also raises questions about how the organization manages its finances in other areas,” said Senator Tom Coburn, Republican of Oklahoma.

We covered S.2924 back in March when Chuck Grassley wrote a nasty note asking for – gasp – accounting details. While I totally support FDL’s outrage towards for-profit CEOs, I have to remind them that we already have the accounting details of for-profit corporations; so if Jamie Dimon gets $42 bazillion a year, we can just dig into his financial statements to figure out why. Chances are assets > liabilities so he can do that (unless he’s asking for a bailout but I don’t recall hearing him ask in 2008). With the Boys and Girls Club posting a $13 million loss in 2008, President Roxanne Spillett still earned $593,926. You don’t think that might warrant a little investigation?

FDL goes on to wonder out loud if all non-profits are created equal:

If Senator Coburn is going to stagger down that path, arms flapping wildly at the injustice of these non-profit salaries, then by his reckoning, the NRA’s Wayne LaPierre should forego his $1,139,568 annual salary (as of 2008), and Robert Mazzuca of the Boy Scouts of America needs to pay back that $1,577,600 he received in 2009. (Note: Yaron Brook, President and Executive Director of the Ayn Rand Institute, only pulls down $350K a year. Methinks someone’s not living up to his objectivist potential.)

I’m all for reform but only when applied equally across the board. The alternative is letting the market decide by being an informed donor (using tools like Charity Navigator to see how much particular non-profit execs are making and how they are using their money). If you don’t believe in a non-profit’s compensation practices, don’t give them a thing.

The government can continue to do so without caring or it can get smart about the money that it does not have and start taking a closer look at how non-profits operate. If you ask me, the entire thing is a gaping hole of waste and confusion and you could possibly confirm that with anyone familiar with non-profit accounting.

Death to the Death Tax Fails

South Carolina Senator Jim DeMint had the perfect solution to this estate tax fiasco. GET RID OF THE DAMN THING ENTIRELY!

Unfortunately for DeMint, not too many people think the permanent abolishment of the estate tax is that hot of an idea.


Namely, a whole bunch of Democrats (minus Lincoln and Nelson of Neb) led by Majority Leader Harry Reid. The amendment failed 39-59 in a vote yesterday but no worries lovers of tax-free death! A few races in this fall’s election could kick around the this particular political pigskin, including Reid’s in Nevada where Tea Party darling Sharron Angle supports the permanent repeal.

It’s worth noting that J DeM considered the abolishment of the tax not to be a ‘tax cut’ but a “continuation of current policy since Congress let the tax lapse this year.” In that context, it sounds like Senator DeMint is embracing the fact that Congress screwed the pooch on the whole damn thing and figured that continuing the impotence of Congress was easier than having the same debate over and over.

Estate Tax Vote: An Issue in Fall Vote? [Washington Wire/WSJ]
Senate rejects permanent estate tax death [Don’t Mess With Taxes]
Also see: Senate Rejects Measure to Permanently Abolish Estate Tax [TaxProf]

Accounting News Roundup: Senate Starts Voting on Financial Reform; Risk Management Succumbs to Risk Intelligence; Six Flags Emerges from Bankruptcy | 05.04.10

Voting begins in Senate on Wall Street reform [Reuters]
The latest partisan bickering effort in Congress will get underway today, although the first votes are not likely to be controversial. The first amendment to Senator Chris Dodd’s (D-CT) 1,600 page epic has been proposed by Barbara Boxer (D-CA) and it state “that no taxpayer funds could be used again to bail out financial institutions,” something that anyone up for reelection will likely get behind.

PwC partner Colin Tenner sues over redundancy [Times Online]
Mr Tenner claims that he was let go because of his suffering from depression and anxiety. He claims “mismanagement at PwC and bullying by a client led to him to take sick leave in September 2007. He alleges that he approached PwC in spring 2008 to arrange a phased return to work but says that these discussions broke down, leading to his redundancy.”

Of interest is how the tribunal will decide, “what responsibilities partners at a professional services firm have when one of their number displays signs of stress or becomes mentally ill but wishes to remain in the partnership.” This seems odd primarily because most partners are constantly showing signs of stress and if they’re not, one just assumes they’re mentally ill.


Picower Estate to Pay Billions to Madoff Investors [WSJ]
The estate of Jeffery Picower, a Madoff investor who drowned in his pool last fall, will pay $2 billion to the Madoff trustee in charge of recovering money for investors. This will more than double the $1.5 billion recovered so far.

New Career Path: ‘Risk Intelligence Officer’ [FINS]
Much can be learned from the financial crisis; not least of which is that a lot of companies sucked at managing their risk. Case in point, “risk management” is a prehistoric idea now and one Deloitte principal argues that a “risk intelligence officer” is new sage in this area:

The job of a risk intelligence officer is to assess the organization’s risks and inform business line managers where they need to focus their risk-management efforts.

“They need somebody who can see the big picture and connect the dots,” said [Rick] Funston, who is a principal with Deloitte in Detroit. Deloitte has been encouraging its clients to develop the new role, he said…

Effective risk professionals find a way to discuss systemic failures and take steps to strengthen the organization’s resilience and agility. Part of the job is to understand a company’s vulnerabilities and make it OK to talk about them, institutionalizing the discussion.

Six Flags Emerges From Bankruptcy [Reuters]
Six Flags has emerged from Chapter 11 bankruptcy just in time for summer and now “has more financial flexibility to pursue a shift in strategy toward attracting more families to its amusement parks.” Not sure who an amusement park company would target other than families but it’s nice to see you back in the game, 6F.

Accounting News Roundup: Goldman CFO’s ‘Unfortunate’ Response; EU Prepares to Scrutinize Auditors; SEC Chief Accountant: June 2011 Deadline for Convergence Is ‘Arbitrary’ | 04.28.10

Carl Levin To Goldman CFO: When You See ‘Sh–ty Deal’ E-mail, ‘Do You Feel Anything?’ [TPM]
Late in the proceedings of yesterday’s epic Senate subcommittee hearing (involving some of the Almighty’s finest), Goldman CFO David Viniar may have had a bit of a Freudian slip when he responded to potty-mouth Senator Carl Levin’s badgering.

Levin asked Viniar how he reacts to hearing about the email. “Do you feel anything?” Levin asked. Viniar replied: “I think that’s very unfortunate thich got a smattering of laughter from around the room. Levin asked Viniar how he reacts to hearing about the email. “Do you feel anything?” Levin asked. Viniar replied: “I think that’s very unfortunate to have on e-mail,” which got a smattering of laughter from around the room. “On an e-mail?” Levin shot back angrily. “How about feeling that way?” Viniar started to backtrack: “I think that’s a very unfortunate thing for anyone to have said in any form.” “How about to believe that and sell that?” Levin asked. “I think that’s unfortunate as well,” Viniar responded.

That unfortunateness is in no particular order.

Brussels to scrutinise role of auditors [FT]
The EU has had it with auditors in their current form and is turning their stink eye towards the profession with a whole lot of skepticism, especially since Ernst & Young got in trouble over you-know-what.

Michel Barnier, the new EU internal market commissioner, joined the debate on Tuesday saying that the role of auditors needed closer scrutiny now that the financial turmoil of the past two years was subsiding.

“I’m convinced that it is the right time to launch a real debate at European level on the subject of audit. This conviction is reinforced by the questions recently raised in the context of the audit of the accounts of US bank Lehman Brothers,” Mr Barnier said.

The FT reports that the EU is kicking off this increased level of scrutiny by publishing a green paper this fall on the subject that will examine the way “audit firms are owned and governed…the concentration in the audit market and its implications on financial stability, the emergence of small and medium-sized practitioners, the audit of smaller companies and international standards on auditing,” and also the supervision of global audit firms.

PwC pays £427,000 damages over valuation work [Accountancy Age]
The original suit was for £35 million; that would a W for P. Dubs.

Miami accountant’s workers accused of aiding fraud [Miami Herald]
Two employees of “Miami’s go-to forensic accountant if you want to get ripped off” Lewis Freeman have been charged with conspiring with him in the embezzlement scheme that he pleaded guilty to last month.

SEC Chief Accountant Says Convergence Need Not Be Completed by June 2011 [Journal of Accountancy]
No rush on that, sayeth James Kroeker, on convergence by June 2011:

SEC Chief Accountant James Kroeker told the JofA Tuesday that he would support the boards’ cutting the number of projects due in June 2011, provided there was good rationale for a delay.

“June 30, 2011, is an arbitrary deadline and it’s not one that’s been put in place by the SEC or by our road map,” said Kroeker.

Accounting News Roundup: Haiti Relief Passes Senate; Accounting Job Surge? CPAs Basically Control People’s Lives | 01.22.10

• Senate votes for faster tax breaks for Haiti gifts [WaPo]
As expected, the U.S. Senate unanimously passed legislation yesterday that allows taxpayers to deduct donations made for Haiti relief efforts. You have until the end of February to donate so that it may be included on your 2009 return.

Maybe it’s bad legislation but we’ve been over that.

• CPA Jobs Set for Surge. But When? [CPA Trendlines]
That’s the question, isn’t it? Rick Telberg, who has done a great job of tracking the Bureau of Labor Statistics on accountants, points out that while the latest BLS forecasts a 22% increase (279,400 jobs) by 2018, there’s no indication that it’s happening now:

[M]any tax, accounting and finance professionals are still slogging through the Great Recession. The Association for Financial Professionals, for instance, reported that about one in four respondents say their organizations will contract in 2010. At the same time, a PricewaterhouseCoopers survey of private companies found 43 percent of CEOs and CFOs still budgeting no expansion over the next 12 months to 18 months. The data just seem to reinforce economic uncertainties and a weak outlook.


The BLS is looking past the past the recession for the jump in opportunities but just when the hell will that be? Just because the economy isn’t contracting currently, doesn’t mean it won’t in the future and this “recovery” has been tepid at best.

• Theismann to CPAs: You Are the Conscience of America [Web CPA]
Joe Theismann gets it. He knows that without all of you out there in CPA land, your clients don’t stand a chance. They’d be finished. Finished!

“You’re the conscience of America,” Theismann told conference-goers. “You are the survivors in tough times. With accountants, I’m not looking for someone to file taxes and do my financials. I can do that myself online. In your position you can basically control people’s lives.”

So get out there and control somebody’s life. Joe Theismann is expecting it.

Homebuyer Credit to Continue Helping People Get into Crazy Debt?

Thumbnail image for overwhelmed.jpgMaybe! The opportunity to take advantage of the current credit expires on November 30th. Luckily, the brain trust known as the U.S. Senate is all over this and is going to get a new plan in place come hell or high water.
The best part is that under the Senate’s latest proposal, the credit will now be “extended beyond first time buyers,” as reported by Bloomberg.
So, if you’ve lived in your current shack for five years and you’re looking to upgrade, you’ll be eligible for a $6,500 credit. First time homebuyers will still receive an $8,000 The new extension of the credit would be available for home purchases under contract by April 30, 2010 and close by the end of June.


But that’s not all! Under the new plan, the credit would be available for individuals earning $125k up from $75k and couples earning $250k up from $150k. Presumably more McMansions will get purchased this way.
More good news: this thing has bipartisan support:

Senate Minority Leader Mitch McConnell, a Kentucky Republican, agreed that most lawmakers support the unemployment and homebuyer measures. “We’re not that far away from an agreement,” he said earlier today.

Who knew it was possible? The problem is, not everyone thinks this is a good idea, including Joe Kristan over at Tax Update Blog:

It’s nice to know that a majority of the millionaires in the Senate think it’s wise to spend $40,000 to $80,000 of our money for each new home sale caused by the credit, even though the credit is rife with fraud.
The credit extension would be tied to an extension of unemployment benefits; the provisions may still be changed, and it has to be reconciled with a House bill that has no homebuyer credit provision.
If they extend it this time, does anybody believe they won’t try to extend it again every time it is set to expire?

And Tax Girl:

Does that cover everybody? Does everyone get a tax credit now? Cause we wouldn’t want to be handing out that free money and leave someone out.

And Don’t Mess with Taxes:

My concern is that if people need the credit to get into a first home or move up to a larger one, are they getting in over their heads in debt? And isn’t that what got us into the economic trouble we’re in now?

Call us party poopers but we’ll go with accountants over the U.S. Senate any day.
Homebuyer Credit Extension a Done Deal? NOL Carrybacks Enhanced? [Tax Update Blog]
First Time Homebuyer’s Credit Likely Expanded [Tax Girl]
Reconfigured home buyer tax credit [Don’t Mess With Taxes]
Also see: Lawmakers Find A Way To Outfox 4-Year Old Tax Cheats [DB]